Employment Law Guide - Ireland
1 What terms govern the employment relationship? In particular: 1.1 Is a written employment contract or statement of employment terms required?
This statement must include:
• The names of the parties;
• The address of the employer;
• The place of work, or, where there is no fixed place of work, the places the employee is expected to work;
• The job title and the nature of the work the employee is expected to carry out;
• The date of commencement of the contract of employment;
• The rate of pay (or the method of calculation for same) and whether the employee will be paid weekly, monthly or otherwise;
• The terms and conditions relating to hours of work and overtime;
• Details of rest periods and breaks
• The terms and conditions relating to paid leave;
• The terms and conditions relating to sick leave;
• The terms and conditions relating to pensions or pension schemes;
• The notice period and the way in which it is calculated;
• Any collective agreements which directly affect the terms and conditions of the employee’employment; If an employee has been employed on a fixed term contract, the written statement must also include the intended duration of the contract.
1.2 Are there any terms implied by law into the employment contract?There are certain terms that will be implied by law into an employment contract even if they are not specifically mentioned in the contract itself or in the written statement of terms provided by the employer. Terms can be implied by:
• Customary agreements: for example the right to sick pay or the right to suspend In the case of BP Refinery (Westernport) Pty Ltd v Shire Hastings  52 AJLR 43, the court held that in order for a term to be implied by custom, the term must be:
• reasonable and equitable,
• necessary for the contract to be effective, so that no term will be implied if the contract is effective without it;
• so obvious that ‚”it goes without saying‚”
• capable of clear expression
• not contradictory to any express terms of the contract
• Statute: for example the right not to be unfairly dismissed, the right to redundancy payments and the right to work in a safe environment.
• Collective Agreements: any agreement between an employer and a trade union automatically binds any employees who are members of that trade union.
In O’Cearbhaill v Bord Telecom Eireann  ELR 54 the Supreme Court held that any agreement between an employer and a trade union which altered an employee’terms of employment were binding on employees who were members of that trade union.
• The common law: terms will be implied by law where it is necessary to do so in order to give the contract commercial efficacy. This can arise when a term is not broad enough to cover what was originally intended to be covered by the parties. In addition, duties such as an employer’duty of care and an employee’duty to take reasonable care in the course of his work will be implied into any employment contract. An employee also has a duty of fidelity and confidentiality to his employer, often referred to as a duty of ‘trust and confidence’ (see TSB Bank plc v Harris  IRLR 157)
• The Irish Constitution (for example the right to join a trade union)
•EU law (for example an employee’s right not to have the terms of his employment altered by the transfer of an undertaking).
1.3 Are collective agreements with trade unions or employee representatives common (generally or in specific industries)?Generally speaking, there are three types of collective agreements: Employment Regulation Orders (EROs): these are normally in relation to employees’ rates of pay and are agreed in Joint Labour Committees, which are industry specific committees made up of equal numbers of employer and employee representatives, who are chosen by the Labour Court.
The Chairman of these committees is the Minister for Jobs, Enterprise and Innovation. Agreements that have been agreed between a trade union and an employer are generally known simply as ‘collective agreements’. These can govern anything from working conditions, to working hours and redundancy agreements. If a collective agreement is registered with the Labour Court, it becomes a Registered Employment Agreement (REA), which is legally binding on both employees and employers. The rights contained in REAs are thus more strongly protected.
On the 7th July 2011, the High Court ruled that EROs would no longer have statutory effect and employees who were previously covered by such agreements are required to revert back to the terms laid out in their original contracts of employment. The government is expected to publish new legislation in response to this ruling, but this is yet to happen at the time of writing. Collective agreements are more common in certain industries than in others, for example in drapery, printing, electrical contracting and the construction industry, which have collective agreements registered with the Labour Court as Registered Employment Agreements.
2. Is there a minimum wage? If so, please give details, in particular whether it applies to all employees, regardless of their age and experience.Since 1st July 2011, the national minimum wage is €8.65 per hour for an experienced adult employee. The National Minimum Wage Act 2000 defines an ‘experienced adult employee‚Äù as any employee who has been engaged in employment of any kind for a period of 2 years since the age of 18. If an employee is only in his first or second year of employment since turning 18, he or she cannot be classified as an ‘experienced adult employee‚Äù. He or she will only be entitled to €6.92 per hour if they are in the first year of employment since turning 18 or €7.79 per hour if they are in the second year of employment since turning 18). If an employee is under the age of 18, they are only entitled to €6.06 per hour.
The 2000 Act also provides for separate rates for individuals who are completing traineeships under the supervision of an employer. Such a trainee is entitled to €6.49 per hour for the first third of his or her training, €6.92 per hour for the second third and €7.79 per hour for the last third. If an employer cannot afford to pay the minimum wage, it can apply to the Labour Court for an exemption which can cover a period of between 3 months and one year. This exemption can only be applied for once and must be done with the consent of the employees, who must agree to be bound by the decision of the Labour Court.
The 2000 Act also does not apply to the remuneration of a person who is employed by a spouse, father, mother, grandmother, grandfather, step father, step mother, son, daughter, step son, step daughter, grandson, granddaughter, brother, sister, half-brother or half-sister of the employer or an apprentice within the meaning of or under the Industrial Training Act, 1967, or the Labour Services Act, 1987. 3 Are there restrictions on working hours? If so, please give details. The Organisation of Working Time Act 1997 establishes a maximum average of 48 hours work per week for most employees. Although it is possible for an employee to work more than 48 hours in a working week, he or she must not average more than this over the course of a ‘reference period’ which is generally taken to be 4 months, although this can be changed to 2 months for night workers and 6 months for employees who must commute long distances to work or who work in the following industries:
the security industry; hospitals; prisons; gas/electricity; airports/docks; press, radio, television or cinematographic production; postal and telecommunication services; agriculture; and businesses with peak periods at certain times of the year, such as tourism. It is also possible for the reference period to be extended to 12 months by way of a collective agreement which is approved by the Labour Court. Employees are entitled to a daily rest period of not less than 11 consecutive hours in each period of 24 hours during which they work for their employer. In addition, an employee is entitled to a rest period of at least 24 consecutive hours in each period of 7 days.
Employees are entitled to a 15 minute break for every 4 and half hours worked or a 30 minute break for every 6 hours (although there is no requirement to pay the employees during these break periods). Section 14 of the 1997 Act states that employees are entitled to be compensated for working on a Sunday by a pay increase or paid time off, if this has not otherwise been taken account of in determining pay. It is worth noting that members of the Defence Forces and An Garda Siochana (the police force) are not covered by the 1997 Act, while other employees, such as those already party to collective agreements or those working in exceptional circumstances or in emergencies, may be exempt from specific provisions of it.
4. Is there a minimum holiday entitlement? If so, please give details. How many public holidays are there in a year and are they included in the minimum holiday entitlement? The Organisation of Working Time Act 1997 provides that an employee is entitled to 4 working weeks’ leave in a year in which he or she works at least 1365 hours, one third of a week for each month in a year in which he or she works 117 hours, or 8% of the hours he or she has worked in a leave year (provided this does not exceed 4 weeks). If the employee qualifies for more than one of the above ways of determining leave, he or she can decide which method to use. In addition, full time employees are entitled to public holiday benefits for the following nine public holidays:
1. Christmas day (25th December)
2. St Stephens day (26th December)
3. New Year’Day (1st January)
4. St Patrick’day (17th March)
5. Easter Monday
6. The first Monday in May;
7. the first Monday in June;
8. The first Monday in August;
9. The last Monday in October; Part time employees are only entitled to a public holiday benefit if they have worked at least 40 hours in the five weeks preceding the day before the public holiday.
5 What rights do employees have to time off in the case of illness or injury? Is that time off paid? Can an employer recover the state sick pay granted to its employees?There is no legislation governing sick leave in Ireland. An employee who is ill is entitled not to attend work however they may be required by their employer to provide a medical certificate verifying the same. Long absences from work may be a ground for dismissal.
An employee has no legal entitlement to sick pay; it is at the discretion of the employer. If an employee can prove to their employer through a medical certificate that he or she was sick or injured, then the leave taken during this period will not count as annual leave. The case of Pereda v Madrid Movilidad SA (C-277/08) provides that where an employee can prove that he or she was sick or injured during their holidays, he or she must be allowed to take that annual leave at some other time.
If an employee has made the requisite social insurance contributions and has no entitlement to sick pay from the employer, the employee may be entitled to an Illness Benefit or an Injury Benefit from the State for the duration of the time the employee is unable to work.
How much an employee receives will depend on the amount the employee is normally paid by their employer and whether the employee is supporting other adults or children. The Medical Care Scheme may also entitle someone who has been injured to recoup some of their medical costs if he or she has made sufficient Social Insurance contributions and their employer has no scheme in place to cover this.
6 What are the statutory rights of employees who are parents or carers (including those of disabled children and adult dependants)? How is employee pay affected during periods of leave?Maternity rights
Section 8 of the Maternity Protection Act 1994 (the 1994 Act), as amended by the Maternity Protection (Amendment) Act 2004 and the Maternity Protection Act 1994 (Extension of Periods of Leave) Order 2006 entitles a pregnant employee to 26 consecutive weeks as a minimum period of maternity leave. “Pregnant employee” means one who is actually pregnant and has so informed her employer. The employee must notify her employer in writing that she intends to take maternity leave, along with a medical certificate confirming the expected date of delivery. The commencement of the maternity leave is at the discretion of the employee but must commence at least 2 weeks before the end of the expected week of delivery. The cessation of maternity leave is also at the discretion of the employee but shall end no earlier than four weeks after the end of the expected week of delivery. Maternity leave may begin at an earlier date for medical reasons, provided a medical certificate is produced. Section 12 of the 1994 Act allows for maternity leave to be extended if the baby is born after the anticipated week of delivery.
The employee should notify her employer as soon as practicable of her intention to avail of this right. Section 14 of the 1994 Act provides for “additional maternity leave” of 16 weeks beginning once maternity leave ends. This is unpaid, and the employee must notify her employer four weeks prior to her expected return. Entitlement to pay during maternity leave is dependant on the terms of the contract of employment. However, where an employee is not entitled to pay from her employer whilst on maternity leave, she may be entitled to claim social welfare benefit, which is calculated at a rate of 80% of the employee’reckonable earnings, provided that she has made the required PRSI contributions. As of January 2011, the minimum payment for maternity benefit is €217.80 per week, while the maximum is €262 per week. However, a woman receiving Maternity Benefit cannot receive less than she would receive if claiming Illness Benefit. If she could receive a higher amount by claiming Illness Benefit, then she must be paid this amount.
This social welfare benefit is only available for the 26 weeks‚Äô maternity leave and not for the additional maternity leave. The 1994 Act states that an employee has a general right to return to the position which she held before commencing maternity leave or a suitable alternative. The 1994 Act states that any termination or suspension of an employee whilst on maternity leave will be deemed void. Further, the 1994 Act provides that any purported dismissal of an employee which is connected to her pregnancy will be automatically deemed unfair. Paternity rights While paternity leave is not provided for under Irish employment law, some employers do provide a period of paid leave for male employees following the birth or adoption of their child. For example, fathers in the civil service are entitled to a period of special leave of three days with pay when their child was born on or after the 1st January 2000, or if their child was adopted after the same date. Otherwise, it is entirely within the employer’discretion.
Male employees are, however, still entitled to parental leave (which is mentioned below). Adoption rights The Adoptive Leave Act 1995, as amended by the Adoptive Leave Act 2005, grants only the adoptive mother the right to avail of adoptive leave, except in a situation where the male is the sole adopter. The employee whose adoptive leave begins on or after 1st March 2007 is entitled to a minimum period of 24 weeks’ adoptive leave, and 16 weeks additional adoptive leave on request. Entitlement to pay during adoptive leave is dependant on the terms of the contract of employment. However, an employee may qualify for adoptive benefit from the Department of Social Protection if they have made sufficient PRSI contributions. This adoptive benefit is only available for the first 24 weeks‚Äô adoptive leave and is not available for the additional 16 weeks adoptive leave. An employee is required to give his or her employer 4 weeks’ notice of their intention to take adoptive leave before the expected placement of the child, regardless of whether it is a foreign or domestic adoption. Parental rights The Parental Leave Act 1998 as amended by the European Communities (Parental Leave) Regulations 2000, SI 231/2000 and the Parental Leave (Amendment) Act 2006, grants the right to parental and “force majeure” leave. In accordance with Section 6 of the 1998 Act, the natural or adoptive parent of a child is entitled to a period of 14 working weeks’ parental leave in order to care for the child.
A new EU Directive is expected to be transposed into Ireland in March, 2013 which will extend the period of unpaid parental leave to four months. This period of leave must end no later than the child’eighth birthday, or, in the case of a child who is adopted (and who is between the ages of 6 and 8 at the time of the making of the adoption order) the leave must be taken within two years from the making of the adoption order. In the case of a disabled child, the Act permits the employee to take parental leave up until the child reaches 16 or ceases to have a disability.
Parental leave is only available to employees with one year’continuous service with the employer, unless the child is very close to the age thresholds mentioned above and the employee has been working for the employer for more than three months, in which case the employee is entitled to pro-rata parental leave. The employee will be entitled to one week for each month of continuous employment which he or she has accrued up to the date of the commencement of the paternity leave. A minimum of 6 weeks’ notice of the intention to take parental leave must be given to the employer. The notice must include the date, duration, and manner in which the leave is proposed to be taken (a continuous period of 14 weeks or with the consent of the employer a combination of days and hours). An employee is not entitled to pay while on parental leave, nor is the employee entitled to any kind of social welfare benefit.
Carer’leave is governed by the Carer Leave Act 2001. It allows employees, who have been employed in their particular job for a period of 12 consecutive months, to leave their employment in order to care full-time for an individual who has been deemed to be in need of full time care and attention by a deciding officer of the Department of Social Protection. The minimum period of leave that may be taken is 13 weeks, while the maximum is 104 weeks. While such leave is unpaid, the 2001 Act ensures that those who avail of carer leave have their jobs protected until they return. The employee must give the employer 6 weeks notice, in writing, of their intention to take carer leave. The employee must give the employer 4 weeks notice, in writing, before the date he or she will return to work stating his or her intention to return. Depending on an employee’PRSI contributions, he or she may be able to apply for Carer Benefit. If this is not the case, they may still be eligible for Carer Allowance, which is means-tested. Qualifying for either of these is not a pre-requisite for carer leave.
Force majeure leave Section 13 of the Parental Leave Act 1998 allows for employees, under certain circumstances, to take force majeure leave. This type of leave arises out of urgent family reasons due to illness or injury demanding the presence of the employee “at the place where the [injured or ill] person is, whether at his or her home or elsewhere”. Employees are entitled to a maximum period of three days force majeure leave in a 12 consecutive month period and to five days in a 36 month period. Force majeure leave may be taken in respect of an employee’s:child; spouse or person with whom they are living as husband and wife; a person to whom the employee is in loco parentis; a brother or sister; a parent or grandparent. An employee is required to give notice in writing to the employer, as soon as practicable thereafter, of the date the leave was taken and the reasons for the same.
7 Does a period of continuous employment create benefits for employees?A continuous period of employment entitles employees to certain rights which they would otherwise be unable to avail of. For instance, the unfair dismissals legislation only covers those who have at least one year’continuous year of service for the employer. Further, the length of continuous employment will dictate the level of notice of termination which an employer has to provide an employee with. For example, an employee who has at least 13 weeks continuous service is entitled to at least one week’notice of termination of their employment.
Any employee who is over the age of 16 and has completed 104 weeks of continuous service for a particular employer is entitled to statutory redundancy. An employee must have at least one year’continuous service with the employer if he or she wishes to take parental leave, unless the child is almost five years of age or eight years of age (in the case of an adopted child) and the employee has been working for the employer for over three months but less than 12 months, then the employee will be entitled to pro rata leave.
7.1 If individual employees are transferred to a new entity, are they deemed to retain their period of continuous employment?When a business, or part of a business, is taken over by a new employer due to a merger or transfer, a transfer of undertakings occurs which means that the new employer is legally obliged to take on the existing staff of that particular business or part of that business. The service the employee has accrued up until then under the previous employer will then be deemed to have been under the new employer, so in those circumstances employees do retain their period of continuous employment. Further, the employees are entitled to terms and conditions of employment which are no less favourable than those they enjoyed whilst working for the previous employer at the time the transfer took place.
8 To what extent are temporary and agency workers entitled to the same rights and benefits as permanent employees?The Employment Equality Acts 1998-2007 apply to all employees irrespective of their length of service. Under The Protection of Employees (Part Time Work) Act 2001, part-time employees are entitled to terms and conditions which are no less favourable to those of comparable full-time workers unless any favourable treatment can be justified on an objective ground. Employees on what are known as “fixed-term contracts” in other words, the contract ends on a specific date or when a task is completed, have, in general, the same rights as those on open-ended contracts i.e. contracts that continue until one of the parties ends it.
The Protection of Employees (Fixed-Term Work) Act 2003 provides extensive protection to fixed-term employees. The 2003 Act aims to ensure the principle of non-discrimination is put into practice in order to improve the quality of fixed-term work and also to establish a framework to avoid employers abusing employees by putting them on successive fixed-term contracts.
The 2003 Act requires the treatment of a fixed-term employee to be less favourable than the treatment of the comparable permanent employee in order to make a claim, a difference in treatment per se is not enough. Section 2 of the Unfair Dismissals Acts provides that the Acts shall not apply to a dismissal which constitutes simply the expiry of the term of a fixed-term contract or the extinction of the purpose of a specified-purpose contract without the purpose being renewed under the contract, so long as the following three conditions are met:
• There is a written contract
• The contract is signed by both parties i.e. the employer and the employee.
• The contract actually specifies that the Act will not apply to a dismissal consisting only of the expiration of the contract’term without being renewed or the extinction of the purpose, it also having not been renewed, under the contract.
Where an employer terminates a fixed-term contract before its expiry date or the cessation of the purpose as specified in the contract, the employee is entitled to claim unfair dismissal, so long as he or she has completed one year’continuous service, even if the above three conditions have been met. Even where a fixed-term contract comes to an end and the contract complies with 1 to 3 above, the employee may still be able to claim unfair dismissal if he or she is employed on successive fixed term contracts and the gap between each contract is no more than 3 months, and the employee can establish that the last contract was, at least in part, for the purpose of avoiding liability under the Unfair Dismissals Acts. The 2003 Act does not apply to agency workers, but the European Parliament has adopted the Temporary Agency Work Directive 2008/14/EC, and each Member State has until 5th December 2011 to implement it.
The Directive aims to set up a framework which ensures that temporary workers are protected whilst also considering the need for a framework for the use of temporary agencies to play a part in the creation of jobs. Agency workers who are paid by an agency are deemed to be employed by that agency for the purposes of e.g. the Redundancy Payments Acts 1967-20007, the Maternity Protection Acts 1994 and 2004, and the Payment of Wages Act 1991. The only exception is the Unfair Dismissals Acts 1977-2007, where the employee is deemed to be employed by the third party for whom they are carrying out the work under a contract of employment, regardless of whether that third party pays the wages or salary of the employee. A claim of unfair dismissal in such a situation would be brought against the third party.
9 What statutory data protection rights do employees have? Employees have certain rights under data protection legislation in relation to the holding and processing of their personal data. A distinction is made under the legislation between personal data and sensitive personal data. Personal data is data which relates to a living individual which can be identified by it or from the data in conjunction with other information which is or is likely to come into the possession of the data controller. Sensitive personal data is data pertaining to an individual’sexual orientation, political opinions, racial or ethnic origins, religious or other beliefs, health, trade union membership, criminal proceedings or conviction. The employee must explicitly consent to the processing of sensitive data. Employers are obliged to ensure that any data they hold about employees is: obtained and processed fairly; kept securely and take appropriate security measure to ensure same; up-to-date and accurate; kept no longer than is necessary; only obtained for one or more specified, explicit and legitimate purposes; not processed or disclosed in a manner which is incompatible with the aforementioned purposes; is adequate, relevant and not excessive in relation to the aforementioned purposes. Further, in the case of sensitive personal data, the employee must explicitly consent to the processing of sensitive data.
However, there are two exceptions where the data is held in compliance with the employers’ legal obligations, e.g. under health and safety legislation and where the information is held to safeguard the employees’ interest e.g. in a harassment case. Employees have a right to ask their employers why personal data is being held and are permitted to obtain hard copies of such data. Such requests must be in writing and the employer can impose a maximum fee of €6.35 for doing so. The employee also has a right to ensure that any inaccurate and/or false data is rectified, blocked, erased or destroyed.
10 What protection do employees have from discrimination or harassment, and on what grounds?DiscriminationThe Employment Equality Acts prohibit discrimination by an employer on the following nine grounds:• Gender.
• Marital status.
• Family status.
• Sexual orientation.
• Membership of the travelling community. The Employment Equality Acts apply to all employees irrespective of their length of service. Employees may bring a complaint to the Equality Tribunal whose decision may be appealed to the Labour Court. The Employment Equality Acts prohibit discrimination in relation to
• access to employment
• training or experience in relation to employment
• conditions of employment
• promotion or recruitment; or
• classification of posts The Employment Equality Acts 1998, 2007 provide statutory protection for individuals being interviewed for an employee position as well as for individuals who are already employed by an employer. Any questions about age, disability, marital status, sexual orientation or any other area of discrimination recognised by the Acts could give rise to a cause of action by the interviewee.
Furthermore, it is advisable for both parties to take a note of what is said during the interview process as any misrepresentations made can subsequently give rise to a cause of action (see McNally v Welltrade International Ltd  IRLR 497). Harassment and Sexual Harassment The Employment Equality Acts require all employers in Ireland to take reasonable steps to ensure harassment does not occur.
Under the Employment Equality Acts the harassment may be by a person employed at the same place or by a fellow employee, by the victim’employer themselves or by a client, customer or some other business contact of the victim’employer, and the circumstances surrounding the harassment are such that the employer should reasonably have taken action to prevent it occurring. Harassment or sexual harassment will also constitute discrimination by the victim’employer in relation to the victim’conditions of employment where the victim is subsequently treated differently in the workplace or otherwise in the course of their employment because he or she has tried to either reject or accept the harassment, or, it could have reasonably been expected that the individual would have faced such treatment in the first place. Individuals who have been the subject of sexual harassment may seek a legal remedy against either the harasser or the employer, assuming that they are different parties, or may seek a remedy against both. In practice however, the harasser is not usually a ‘good mark’ for a claim and so as a result, the employer becomes the subject of the claim through vicarious liability.
11 Do whistle-blowers have any protection? If so, please give details.Whistle-blowers are protected by law and employers cannot simply choose to describe certain things as ‘confidential’. The information in question must have the necessary element of secrecy or confidentiality connected with it in order to be protected. In Faccenda Chicken Ltd v Fowler (1986) it was laid down that information which may be classified as a trade secret and is known, or should be known, to the former employee as such, is still protected once the employment has come to an end, regardless of whether the employer explicitly pointed out to the employee the boundaries of what he seeks to protect as confidential or binding the employee by way of a written agreement. However, disclosure may be held to be legitimate where it is in the public interest to disclose the information. It is important to note that the disclosure of such information will only be acceptable when it is divulged to the appropriate persons or authorities, and that whistle blowing will not be condoned when it is at random and for no particular purpose. This kind of confidential information cannot simply be relayed to the world at large.
12 What rights do employees have when their employment contract is terminated? Please provide information on: 12.1 Notice periods.Statute The Minimum Notice and Terms of Employment Act 1973 provides that if an employee has been employed continuously for at least 13 weeks, he or she is entitled to a minimum notice period if his contract is terminated. The length of this notice period will depend on how long an employee has worked for the employer:
• Less than two years: one week’s notice
• Two years to five years: two week’s notice
• Five years to ten years: four week’s notice
• Ten years to 15 years: six week’s notice
• Fifteen years or more: eight week’s notice
This is the minimum notice period which is permitted. The contract of employment may provide for a longer notice period.
The notice period for valid termination of an employee’s contract of employment will be the higher of whatever is specified in the employment contract or the statutory minimum period of notice. In the case of the transfer of an undertaking, the service of an employee for the previous employer (i.e. the transferor) will be considered as service for the transferee. Common law The common law position is that, in the absence of a contract or agreed notice period, the employer must give “reasonable”notice. In determining whether a notice period is “reasonable” or not, the courts will consider the following criteria:
• job function;
• length of service;
• age; and
• custom and practice in the particular employment if such exists. 12.2 Severance payments.In the case of employees whose contracts are terminated by way of redundancy, The Redundancy Payments Acts 1967, 2007 provides for a minimum redundancy payment to be made to employees who satisfy the following criteria:
• They are aged 16 or over
• They are in employment that is insurable under the Social Welfare Acts
• They have worked continuously for their employer for at least 104 weeks If the above criteria are met, an employee is entitled to a lump-sum redundancy payment of two week’s pay for every year of service since he or she turned 16 and one further week’s pay on top of this. This payment is tax free and is subject to a maximum earnings limit of €600 per week.
Employers are entitled to a 60% tax rebate on the statutory redundancy payments which were made. If an employer cannot afford to pay the statutory redundancy payment, the employee may apply to the Social Insurance Fund for payment. Where redundancy does not apply, employees do not have a statutory right to severance in Ireland. However, if an employee has been dismissed unfairly, under the Unfair Dismissals legislation, an employee may be awarded compensation, although this cannot exceed 104 weeks gross entitlement.
12.3 Any procedural requirements for dismissal. The Unfair Dismissals Acts 1977, 2007 provides that an employer must give an employee notice in writing of the procedure which he will observe for the purpose of dismissing him within 28 days of the employee having commenced employment. The Industrial Relations Act 1990 (Code of Practice on Grievance and Disciplinary Procedures) (Declaration) Order 2000 provides a set of general guidelines for employers when dismissing an employee. Paragraph 11 states that the steps in a dismissal procedure should be progressive. An example of this would be an oral warning, a written warning, a final written warning, and dismissal. In circumstances where such a progressive approach is not possible and dismissal is necessary at an earlier stage, the dismissal must comply with the general principles of natural justice and fair procedures. Where an employee is dismissed, he is entitled to be told the grounds for his dismissal in writing within 14 days.
12.4 What protection do employees have against dismissal? Are there any specific categories of protected employees? Statute Unfair dismissal The Unfair Dismissals Act 1997 is the relevant legislation in this area. Unfair dismissal can occur when an employer terminates an employee’contract with or without notice or where an employee terminates his own contract as a result of the conduct of the employer (‘constructive dismissal’). In order to qualify for a claim of unfair dismissal, the following requirements must be met:
• The claimant must have brought a claim within 6 months of the date of dismissal. In exceptional circumstances, this may be extended to 12 months.
• The claimant must normally have had at least 12 month’continuous service for the employer before he or she was dismissed, unless he or she was dismissed because of membership of a trade union, pregnancy, giving birth, breastfeeding or any matters connected with pregnancy or birth, or availing of rights granted by the Maternity Protection Acts 1994 and 2004, the Adoptive Leave Acts 1995 and 2005, the National Minimum Wage Act 2000, the Parental Leave Acts 1998 and 2006 and the Carer's Leave Act 2001.
• The claimant must be over 16 and under the retirement age, unless they are claiming they were dismissed because they availed of maternity, parental leave, force majeure leave, or carer’s leave.
• The claimant must not have been a member of the Defence Forces or the Garda Siochiona.
• The claimant must not have been working for a close family member in a private house or farm.
• The claimant must not have been undergoing training or an apprenticeship with F√ÅS, or a statutory apprentice who was dismissed within 6 months of beginning the apprenticeship or within one month of completing it.
• The claimant must not have been undergoing training as a nurse or other specified para-medical employment.In order to justify the dismissal, the employer must show that the employee was dismissed on one of the ‘fair grounds for dismissal’ set out in the legislation. These are:
• the capability, competence or qualifications of the employee for the work he was employed to do
• The employee’s conduct
• The fact that continuation of the employment would contravene another statutory requirement.
• Where the employee lied about his qualifications or continued employment was contingent upon the receiving of a qualification
• Other ‘substantial grounds’ An employer must also show that it followed fair procedures when dismissing an employee. If a claim for unfair dismissal is successful, the dismissed employee is entitled to re-instatement, re-engagement or compensation.
Common Law Wrongful Dismissal
Wrongful dismissal is a claim for a breach of the employment contract. Wrongful dismissal cases are prosecuted through the civil courts.
Damages in a wrongful dismissal case are generally limited to the notice period which the employee did not receive or the balance of the contract. Employees have six years to bring an action for wrongful dismissal. Employees who are statute barred from taking an action under the unfair dismissal legislation may still bring an action for breach of contract. Further, senior executives usually choose this avenue rather than the statutory route as the damages are limited under the Unfair Dismissals legislation to 104 weeks.
13 What rules apply on redundancies?The law in relation to redundancy is regulated in Ireland by the Redundancy Payment Acts 1967, 2007, which applies to all employees in employment covered by the Social Welfare Acts. The legislation sets out the criteria that must be met by an employee in order to receive redundancy payments. These are outlined below:
• The employee has actually been made redundant instead of simply being dismissed. In order to qualify for redundancy payments, an employee must prove that he falls within the definition of redundancy set out in the Act, which states that an employee will have been made redundant if his or her employer:
• Ceases or intends to cease to carry on the business for which the employee was employed either entirely, or at the location in which the employee was employed;
• Ceases or expects to cease to have the requirement for employees to carry out work of a particular kind in the place where the employee works;
• Has decided to carry on the business with fewer or no employees
• Has decided that the work which the employee carried out should be done in a different manner;
• Has decided that the work which the employee carried out should be carried out by another person who is also capable of doing other work for which the employee is not sufficiently qualified or trained. In addition, the court held in the case of St Ledger v Frontline Distributors Ireland Limited  ELR 160 that the statutory definition of redundancy had two main features, ‘impersonality’ and ‘change’.
Accordingly, in order to be a genuine redundancy situation an employee’s dismissal must have been as a direct consequence of change in the workplace and not be based on the employee’s personality in any way. An employee must have been in the continuous employment of the employer for at least 104 weeks since the age of 16. Employers must be fair and reasonable in selecting employees for redundancy. An employee is entitled to bring a claim of unfair dismissal if he or she believes that they were unfairly chosen for redundancy or if no redundancy situation existed. Employers must also consult with the employees before deciding to make them redundant. If a reasonable offer of alternative employment is made by the employer and this is refused by an employee, that employee might lose his or her entitlement to redundancy payments.
Notice Period Employers must provide employees with at least 2 week’s notice that he or she is being made redundant although this can be substantially longer if the employee has been employed by the employer for a long period of time or if the employee’s contract of employment allows for a longer period. Any employee being made redundant will also be entitled, under section 7 of the Acts, to a ‘reasonable’ amount of paid time off to look for alternative employment Redundancy Pay Employees are entitled to two week’s pay for every year they have been in the continuous employment of the employer since the age 16, plus one additional week’s pay. This is subject to a maximum earning limit of €600 a week. Any time taken off work due to injury, illness, strikes or being laid-off by the employer will not be included in the calculation of redundancy pay. Collective Redundancy Collective redundancy arises when a group of employees are made redundant at the same time. What exactly constitutes collective redundancy will depend on the number of employees employed by the employer at the time the redundancies are made. Where there are between 22-49 employees, 5 redundancies will constitute collective redundancy.
Where the number of employees is between 50-99, the number of redundancies required to constitute a collective redundancy is 10. If there are between 100-299 employees employed, 10% of the staff being made redundant will qualify as a collective redundancy. If there are more than 300 employees working for the employer, 30 redundancies are required in order for there to be a collective redundancy. If the above criteria are met, the Protection of Employment Act 1977, 2007 states that the employer must enter into consultations with the employee’s representatives at least one month before the redundancy notice is given in order to determine whether there are any alternatives available. The employer is also obliged to provide in writing:
• the reasons for the redundancy
• when the redundancies will occur
• the criteria used for selecting the employees being made redundant
• the number of employees affected and the nature of their work
• the number of employees normally employed and the nature of their work
• the method for calculating the redundancy payment Short Time/Lay Off It is also important to remember that an employee can become entitled to redundancy payments if he has been laid off or kept on short time for four or more consecutive weeks or for six or more weeks within a period of 13 weeks (where not more than three of those weeks were consecutive).
In order to gain this entitlement, the employee must give the employer notice, in writing, of his intention to claim redundancy payments, after which the employer must either begin paying redundancy or inform the employee that he or she will recommence work within 4 weeks for a period of not less than 13 weeks.
14 Are employees entitled to management representation (such as on the board of directors) or to be consulted about issues that affect them? While employees do not enjoy a general right to management representation, The Employees (Provision of Information and Consultation) Act 2006 provides that every employee in an undertaking of 50 or more employees has a right to information and consultation. ‘Information’ is defined in the 2006 Act as transmission by the employer to one or more employees or their representatives (or both) of data in order to enable them to acquaint themselves with the subject matter and to examine it and cognate words shall be read accordingly. ‘Consultation’ is defined in the 2006 Act as the exchange of views and establishment of dialogue between either one or more employees or the employee’s representative and the employer.
The employer may at his own initiative or shall at the written request of at least 10 per cent of the employees or by the court or a nominee of the court enter into negotiations with employees or their representatives to establish information and consultation arrangements. In undertakings where this is the case, an information and consultation agreement must be introduced. This can either be agreed between the employer and the employees themselves or between the employer and an employee representative, who must be elected by the employees under section 6 of the 2006 Act.
If it is the case that employers already had a pre-existing negotiation and consultation procedure with their employees before the Act took effect, they are entitled to continue using this agreement, provided it satisfies the requirement of the Act. Any agreement on consultation which is put in place with the employer can specify the issues which the employees require information and consultation on. In the absence of agreement on the issues, the information and consultation must take place on the following:
• any recent and probable developments of an undertaking’activities and economic situations; •the situation, structure and probable development of employment within the undertaking and any measures envisaged particularly where there is a threat to employment; and
• any decision likely to lead to substantial changes in work organisation or contractual relations.
The act does provide an exception in relation to confidential information whereby the employer is not required to disclose information where it would seriously harm the functioning of the undertaking or be prejudicial to the undertaking. In the event of a breach of one of the provisions of this Act, an employee representative is entitled to bring a case before the Rights Commissioner who may, if the complaint is well founded, direct an employer to take a specific course of action or to pay the employee compensation. This decision can be appealed to the Labour Court.
14.1 Is employee consultation or consent required for major transactions (such as acquisitions, disposals or joint ventures)?Under Regulation 8 of The EC (Protection of Employees Rights on Transfer of Undertakings) Regulations 2003 an employer has an obligation to inform and to consult with the employees affected by a transfer of an undertaking. In relation to the obligation to provide information, this must be given to the employee representatives not later than 30 days before the transfer is carried out or, in any event in good time before the transfer is carried out. Where there are no employee representatives in the workforce, the employer concerned must arrange for the election of one, but if this cannot be done in time, the transferor or transferee must provide each employee with the relevant information in writing.
The information must contain the date and reasons for the proposed transfer, the legal, economic and social implications of the transfer for the employees and the measures envisaged in relation to the employees. In relation to the obligation to consult, this only applies where either the transferor or the transferee envisages taking certain measures in relation to their employees. This consultation must take place ‘with a view to seeking agreement‚Äù and be carried out at least 30 days before the transfer is carried out or in any event in good time before the transfer.
15 What are the remedies that are available if an employer fails to comply with its consultation duties?Under The Employees (Provision of Information and Consultation) Act 2006 an employee representative is entitled to bring a case before the Rights Commissioner who may, if the complaint is well founded, direct an employer to take a specific course of action or to pay the employee compensation. This decision can be appealed to the Labour Court. In relation to the obligation to consult under Regulation 8 of The EC (Protection of Employees Rights on Transfer of Undertakings) Regulations 2003 an employee or a representative union could make a complaint to the Rights Commissioner or in the alternative seek injunctive relief before the courts if the employer fails to comply with his consultation duties, thus hampering the implementation of the transfer.
16 Can employees take action to prevent any proposals going ahead?Arguably the best remedy for an employee in relation to a proposed transfer of undertakings is to seek injunctive relief preventing any action being taken in relation to the transfer by either or both the transferor and the transferee until the employee’rights under Regulation 8 of the EC (Protection of Employees Rights on Transfer of Employee’s Rights) Regulations.
If an employer does not comply with the requirements of Regulation 8, the option open to an employee or a representative union is to seek injunctive relief, thus hampering the implementation of the transfer, pending compliance. In Maybury v Pump Services Ltd and Eldea Ltd 2 May 1990, High Court unreported, the second named defendant was formed for purchasing the assets, business and goodwill of the first named defendant. The plaintiff met with a shareholder of the purchaser who could not give him any assurances in relation to the terms of his continued employment, nor could the shareholder give any indication of the implications of the transfer for the plaintiff.
The plaintiff made an ex parte application to the High Court to restrain the defendants from going ahead with the transfer, and Blayney J granted an interim order restraining the first named defendant from selling or completing the sale of assets and goodwill to the second defendant. Seeking to injunct a dismissal on foot of a transfer once the transfer has already taken place is far more difficult than attempting to injunct a transfer, thus the Courts will most likely, over time, become more inclined to grant Regulation 8 injunctions because employers can easily have the injunction lifted by simply complying with the Regulation. It is important to note that no consultation, or inadequate consultation, in breach of Regulation 8, can trigger valid industrial action protected by the provision of the Industrial Relations Acts.
17 Is there any statutory protection of employees on a business transfer? In particular: 17.1 Are they automatically transferred with the business?The transfer of undertakings in Irish law is governed by EC (Protection of Employees on Transfer of Undertakings) Regulations 2003 and Directive 2001/23/EC, which provide that any employees of a business are automatically transferred when the business is transferred. An example of this reasoning can be seen in the case of Birch v Nuneaton and Bedworth Borough Council  IRLR 518 where it was held that ‘the employees follow the work and protection is enjoyed by the employees’. It is worth noting that there is no obligation for the employee to transfer with the undertaking. If an employee objects to the transfer of an undertaking, he can choose to terminate his contract, though the case of Symantec Limited v Lyons  IEHC 256; ( 19 ELR 169) stated that, in such an event, the employee will not be entitled to any redundancy payments. 17.2 Are they protected against dismissal (before or after the disposal)?
Article 4 of the 2001/23/EC Directive only allows dismissals in relation to a transfer of undertakings to take place for economic, technical or organisational reasons entailing changes in the workforce. Unfortunately, the Directive gives no guidelines as to what should be considered ‘economic’ ‘technical’ or ‘organisational’ reasons, which has led to a state of flux of sorts, with Member States having to determine for themselves what is allowable and what is not. Regulation 5 of the Irish Regulations provides that:
• the transfer of an undertaking, business or part of an undertaking or business shall not in itself constitute grounds for dismissal by the transferor or the transferee and such a dismissal is prohibited
• nothing in this Regulation shall be construed as prohibiting dismissals for economic, technical or organisational reasons entailing changes in the work force.
• If a contract of employment is terminated because the transfer involves a substantial change in working conditions to the detriment of the employee concerned, the employer concerned shall be regarded as having been responsible for termination of the contract of employment.
17.3 Is it possible to harmonise their terms of employment with other (existing) employees of the buyer?The case law indicates that an employee’contract may not be varied by reason of the transfer of the undertaking and the terms of the original contract of employment should remain in force. It appears that an employee’terms and conditions may only be varied where the pre transfer contract has come to an end due to economic, technical or organisational reasons. The case of Foreningen af Arbejdsledere i Danmark v Daddy’s Dance Hall A/S  IRLR 315 stated that employees are not entitled to waive the rights conferred on them by the Directive and that those rights cannot be restricted even with their consent. This is the position even where the employee would receive new benefits to compensate for the disadvantages resulting from an amendment to his contract of employment so that, taking the matter as a whole he would not be placed in a worse position than before.
18 Is it common to reward employees through contractual or discretionary bonuses? Are there restrictions or guidelines on what bonuses can be awarded? If so, please give details.Both contractual and discretionary bonus schemes are common in Ireland, although it is arguable that such bonuses have been more infrequent in recent times. While contractual bonuses are generally explicitly provided for in the employment contract and are often paid in accordance with pre-determined formulae or when specific targets have been met, discretionary bonuses are, as their name suggests, paid out at the discretion of the employer. However, employers should ensure that discretionary bonus schemes are operated fairly. In general there are no legal restrictions or guidelines on what bonuses can be awarded, although there have been calls for regulations to be brought in this area, especially in the Irish banking sector, where contractual bonuses are common and have led to employees being paid despite the poor economic performance of the undertaking as a whole.
19 Is it possible to restrict an employee’s activities during employment and after termination? If so, in what circumstances can this be done? Must an employer pay its former employees remuneration while they are subject to post-employment restrictive covenants?In the absence of an express term, the law will imply a term of fidelity and duty into every employment contract, which effectively ensures that each employee will conduct himself properly and in the best interests of the employer, while also agreeing not to disseminate confidential or potentially lucrative information. This, when read in conjunction with the express term of exclusive service which should normally be found in any employment contract, would seem to provide an employer with a quite effective way of restricting an employee’s ability to compete with him while still in his employment.
When a contract comes to an end, normally the above duties will come to an end with it, unless the parties have expressly agreed to be bound by a restriction that will continue to apply after the end of the contract. However, even where there is no express agreement, the duty will continue to apply in relation to confidential information and trade secrets, if it can be shown that the information was sufficiently important that it was necessary to classify it as such (see Faccenda Chicken Ltd v Fowler  IRLR 69). Having said this, in the absence of a contractual provision to the contrary there is no common law restriction on employees working with competing employers after termination although, again, they are not allowed to divulge anything that would be classified as confidential or as a trade secret.
In general, it seems that an employer cannot prevent a former employee using the experience he gained while working for him to benefit a competing employer, but he can restrict that employee bringing any information such as client lists, trade secrets etc. to the attention of that employer. If an employer expressly tries to prevent a former employee from working for a competitor, he will have to include a carefully drafted clause detailing this in the employee’employment contract. In general, the law will only enforce such covenants where:•the employer has a legitimate interest to protect
• the restraint is reasonable in terms of the conduct sought to be restricted
• the duration of the restriction is reasonable
• the geographical extent of restriction is reasonable It is also important to note that an employer who repudiates a contract will not normally be allowed to rely on a restrictive covenant contained in that contract (see Cantor Fitzgerald International v Callaghan). There is no requirement under Irish law to pay an employee while they are subject to a restrictive covenant.
20 Are there any proposals for major reform of employment law or pensions law in your jurisdiction?The Employment Law Compliance Bill 2008 proposes some significant changes to Irish employment law, such as giving the National Employment Rights Authority (NERA) statutory footing with the aim of ensuring compliance with Irish employment legislation by strengthening the Authority’s ability to inspect and penalise employers. It also proposes to strengthen the legislation regarding the keeping of employment records by employers by introducing a fine of €5000 and/or 12 months in prison for summary offences by employers and a fine of €250, 000 and/or 3 years in prison for indictable offences. In what could be seen as recognition of the difficulties employees face in enforcing their rights, the Bill contains provisions for the protection of employees who report breaches of employment legislation in good faith and also protects employees from penalisation when enforcing their employment rights.
The introduction of inspectors to monitor the validity of employment permits is also proposed. Pensions A number of changes to the qualifying conditions for the State pension (contributory) have been proposed under the National Pensions Framework, although no legislative action has been taken as of yet. The main change proposed is the introduction of a ‘total contributions’ system to replace the ‘yearly average’ system that is currently in place.
This means that the pension an individual would receive would be directly proportionate to the amount of social insurance contributions that individual has made and would not be based on the total amount averaged out over all the years that the individual aid insurance Collective Agreements As already mentioned, on the 7th July 2011, the High Court ruled that EROs would no longer have statutory effect and that employees who were previously covered by such agreements were required to revert back to the terms laid out in their original contracts of employment. The government is expected to publish new legislation in response to this ruling, but this is yet to happen at the time of writing.
21 Does an Employer need to have a subsidiary company, branch or other legal entity to employ people? If so, is there a requirement for a general manager or other key personnel?In order to employ people in Ireland, a person or company must register with Revenue as one of the following things:
• a sole trader
• a partnership
• a company
• a branch of a company incorporated outside Ireland
• a place of business of a company incorporated outside Ireland If a company incorporated outside of Ireland wishes to employ people in Ireland, it has three options available to it:
• It can set up an entirely new company in which case it will have to register with the CRO, name a company secretary and two directors and provide a yearly set of accounts.
• It can set up a ‘branch’ Although there is no specific definition for the word ‘branch’ in the EC (Branch Disclosures) Regulations 1993, the CRO states in its Information Leaflet No 5 that there is some EC case law which would support the view that ‘a branch is a place of business, which has the appearance of permanency, such as an extension of the parent body, has a management and is materially equipped to negotiate business with third parties, without resource to the parent body, the head office of which is abroad’. Although a branch would be expected to have a management structure in place, there is no specific requirement for a ‘general manager’ or any other key personnel to be employed. Any company setting up a branch in Ireland must register the branch with the CRO by filling in an F12 form (in the case of a company from the EU) or an F13 form (in the case of a company from outside the EU).
• It can set up a ‘place of business’. This differs to a branch in that it only provides ancillary activities such as local information, has no management structure and makes no strategic decisions. All places of business must be registered with the CRO by filling in an F1 form.
22 Does salary need to be paid in the country in which the work is done?Any employer in Ireland must be registered with the Revenue Commissioners and make the relevant PRSI and PAYE payments. If an employee comes to Ireland to carry out business on behalf of a foreign company, it would appear to be possible for them to work in Ireland and be paid in a separate country. However, if they spend over 183 days in Ireland over the course of a tax year or 280 days in Ireland over 2 consecutive tax years, they will be considered to be resident in Ireland and required to pay Irish tax, unless Ireland has a double taxation agreement with the country in which they are normally employed. If this is the case, they must either be exempt from paying tax in one of the countries or receive tax credits in one country for the tax paid in the other country.
At present, Ireland has double taxation agreements with: Australia, Austria, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, India, Italy, Israel, Japan, Korea, Latvia, Lithuania, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Romania, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, UK, USA, and Zambia.
23 Do meetings and documents need to be in your local language even if both parties speak good English?There is no requirement under Irish employment law that documents and meetings must be in English or Irish. It is up to the employer and employee to agree on which language will be used, and it is obviously in the interests of both parties that this is a language which they can easily understand. Cases have been taken in which one party (usually the employee) complains that they did not understand the terms of their employment. In one such case before the Labour Court, it was held that there had been no discrimination on the part of the employer by providing a contract in English, since the complainant had represented to his employer that he could read and understand English, and thus the nature and conditions of his employment. It is important to note that while a contract of employment or other documents and correspondence may be in whatever language the parties agree between them, the contract and terms of employment must adhere to the requirements set out in the Terms of Employment Act 1994 if it is to be valid in Ireland.
24 What legal limitations are there on the notice period the parties can agree (for example minimum notice periods)?Common Law Where no specific minimum notice requirement has been set out in the contract of employment, common law implies the right of both employee and employer to give ‘reasonable’ notice. It is up for the court to decide what constitutes reasonable notice in light of all the circumstances of the employment. A contract’s silence as to notice entitlement will not be interpreted by the courts as granting employment for life. Costello J in the High Court asked what the ‘officious bystander’ would deem to be reasonable notice in a particular situation. Notice must also be clear and unequivocal for it to be valid, and have a specific expiry date or be said to occur on a specific event taking place. It need not be given in writing, unless the contract expressly requires this. The period of notice does not begin to run until the day after the notice is given.
Notice may be given even during periods of illness or leave, with the exception of maternity leave. Statute Attention must also be paid to the Minimum Notice and Terms of Employment Act 1973 (as amended). Section 4 provides the specific notice which an employer must give an employee who is covered by the legislation (see 16.1). In the case of the transfer of an undertaking, the service of an employee for the previous employer (i.e. the transferor) shall be considered as service for the transferee in considering the length of notice. This is the minimum notice period which is permitted. The contract of employment may provide for a longer notice period. The notice period for valid termination of an employee’s contract of employment will be the higher of whatever is specified in the employment contract or the statutory minimum period of notice.
According to the Unfair Dismissals Acts 1977-2001, the date of dismissal shall be the date notice expires, whether or not it was given, worked, and whether payment is made in lieu. It is important to note that, given that notice is added to the actual period of employment, the effect of the notice period may be to carry the employee over the one year’s continuous service threshold and mean that he is now covered by the Unfair Dismissals legislation at the time of transfer, and so he or she may have a claim of unfair dismissal in the event that the transferee terminates his employment.
25 What benefits does the employer have to provide in addition to salary?Breaks: All employees are entitled to a daily rest period of 11 consecutive hours per 24 hours, a weekly rest period of 24 consecutive hours per seven days, a 15 minute break if working 4.5 hours and a 30 minute break if working 6 hours.
Whether the employee is paid during these breaks is entirely at the discretion of the employer, although some industries contain Registered Employment Agreements which may include regulations for breaks. Employees who work on Sundays are also generally entitled to a premium rate of pay, although again, this area is often governed by REAs.
Leave: Under Section 19 of the Organisation of Working Time Act 1997, an employee is entitled to paid annual leave of: (a) Four working weeks in a leave year in which he or she works at least 1,365 hours (unless it is a leave year in which he or she changes employment) (b) One-third of a working week for each month in the leave year in which he or she works at least 117 hours (c) Eight per cent of the hours he or she works in a leave year (subject to a maximum of four working weeks)
Furthermore, an employer is required to grant maternity leave, adoptive leave, carer’s leave, parental leave and leave for jury service where these are legitimately sought.
Public Holidays: If an employer employs an employee on a full-time basis, that employee is entitled to a full day’s pay for a public holiday. Alternatively, they can be given a paid day off within a month, an extra day’s pay or an extra day’s annual leave.
Part-time employees are entitled to be paid for public holidays if they have worked 40 hours in 4 of the 5 weeks preceding the public holiday.
Pensions An employer is not obliged to offer an employee a pension scheme. However, since December 2003, all employers must have a contract with a PRSA (Personal Retirement Savings Account) provider so that an employee can contribute to it if he or she so wishes. If an employer decides to contribute to an employee’s PRSA account, this must be done within 21 days of the month in which the employer’obligations are due. An employer cannot make deductions from this payment.
26 Are there circumstances where it is possible to engage someone as a consultant rather than an employee? If so, what are those circumstances?
Although it is possible to engage consultants instead of employees in Ireland, the word ‘consultant’ is not used in Irish legislation. Instead, such people would be considered ‘self-employed’ contractors. According to the Code of Practice for Determining Employment or Self-Employment Status of Individuals, a person will be deemed to be ‘self-employed’ if all or some of the criteria below apply to him/her:
1. Assumes responsibility for investment and management in the enterprise.
2. Has the opportunity to profit from sound management in the scheduling and performance of engagements and tasks.
3. Has control over what is done, how it is done, when and where it is done and whether he or she does it personally.
4. Is free to hire other people, on his or her terms, to do the work which has been agreed to be undertaken.
5. Can provide the same services to more than one person or business at the same time.
6. Provides the materials for the job.
7. Provides equipment and machinery necessary for the job, other than the small tools of the trade or equipment which in an overall context would not be an indicator of a person in business on their own account.
8. Has a fixed place of business where materials, equipment etc. can be stored.
9. Costs and agrees a price for the job.
10. Provides his or her own insurance cover e.g. public liability cover, etc.
11. Controls the hours of work in fulfilling the job obligations.
26.1 Where applicable, what are the advantages and disadvantages of engaging as a consultant rather than an employee?The advantages of engaging someone as a ‘self-employed’ contractor rather than as an employee are that:
• Someone who engages a ‘self-employed’ contractor has no obligation to arrange for tax and PRSI to be deducted from that person’pay.
• The legislation in relation to working time, minimum pay, holidays, maternity/parental leave and protection from unfair dismissal does not apply to contractors. The disadvantages of engaging someone as a contractor are:
• The mere fact that someone is referred to as a contractor does not mean that the Revenue Commissioner will treat them as such. Revenue may pursue an individual or company for unpaid tax and PRSI if it is decided that someone engaged as a contractor is in fact working as an employee
• The person engaging a contractor may not be in a position to monitor how or when a contractor works
• The person engaging a contractor may not own the intellectual property rights to work done by an independent contractor, while this would normally be the case for an employee.
• A contractor may not be as loyal to the company as an employee, affecting the quality of work done.
• A contractor may be free to hire other people to assist him in his work, over which the person who engaged him or her has no control.
27 What other key issues should a company employing someone be aware of?Inspections: The National Employment Rights Authority (NERA) can carry out an inspection of any employer in Ireland to ensure that they are conforming to legislation. These inspections can either be announced or unannounced and will typically last between 2-3 hours. Registered Employment Agreements: Many industry sectors also have Registered Employment Agreements, which are legally binding agreements on pay and various other conditions of employment. Employers working in the construction, drapery and printing sectors should take note of the REAs that have been agreed in these areas.
Part-Time Workers: The Protection of Employees (Part Time Workers) Act 2001 provides that part-time workers (i.e. an employee whose normal hours of work are less than those of a comparable employee in relation to him/her) cannot be treated less favourably than full-time workers and have a right to the same level of legislative protection.
Employing Young Persons: The Protection of Young Persons (Employment) Act 1996 prohibits the employment of anybody under the age of 18 for late night work and the employment of anybody under the age of 16 generally, with the following exceptions:
• Individuals aged 14 or over can be employed full time during school holidays
• Individuals over the age of 15 can be employed on a part-time basis during school term time but only for a period up to 8 hours at a time.
• Employers are allowed take on individuals as young as 14 for an approved work experience scheme, provided this is not harmful to their health or safety.
• A licence can be obtained from the Minister for Enterprise, Trade and Innovation allowing children under the age of 16 can be employed in cultural, artistic, sports or vocational work provided it is not harmful to their health or safety and does not interfere with their schooling. This licence should be applied for 21 days before the employment commences. While care has been taken in the production of this document, no responsibility is taken by DFMG Solicitors for any errors or omissions contained herein.
This questionnaire is to be used for informational purposes only and should not be construed as legal advice. Professional advice should be sought in all cases.For further information please contact: Roger James DDI: +44 (0) 1223 225286 Email: roger.james [at] taylorvinters.com www.taylorvinters.com Articles in this publication are intended as an overview of the subject area and should not be relied on as legal or other professional advice. You should seek specific legal advice before taking action on any of the issues raised. Taylor Vinters is a trading name of Taylor Vinters LLP. Taylor Vinters LLP is a limited liability partnership registered in England and Wales (registered number OC343503) which is authorised and regulated by the Solicitors Regulation Authority and is authorised and regulated by the Financial Services Authority for investment business. A list of members is available from our registered office.